BILL ANALYSIS
SB 136
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 136 (Huff) - As Amended: June 23, 2009
SENATE VOTE : 36-0
SUBJECT : State real property.
SUMMARY : Authorizes the Department of General Services (DGS)
to dispose of all or any portion of three specific parcels of
state owned real property. Specifically, this bill :
Authorizes DGS to dispose of all or any portion of the following
three specific parcels of state owned real property:
1)Parcel #1, consisting of approximately 2.76 acres, known as
the Harts Mills Forest Fire Station (Old), located at 9476
Oro-Quincy Highway, in Berry Creek, Butte County;
2)Parcel #2, consisting of approximately 47 acres, known as the
Mendocino Ranger Station Excess Land, located at 17501 North
Highway 101, in Willits, Mendocino County; and,
3)Parcel #3, consisting of an approximately 85 acres, known as
the East Campus of the Agnews Developmental Center in Santa
Clara County, and specifies the resolution or mitigation of
any disputes or claims related to the land lease agreement and
the energy purchase agreement between the state and Agnews
Developmental Center Cogeneration Facility, dated December 31,
1990, shall be a cost of sale of all of the property
authorized to be disposed of at the East Campus.
EXISTING LAW :
1)Requires DGS to perform various functions with respect to
state property and provides for the sale, lease, or transfer
of surplus state property.
2)Requires DGS to request authorization from the Legislature
prior to the disposition by sale or otherwise of state land
reported to it by a state agency as being in excess of its
foreseeable needs. Each state agency is required to annually
review proprietary state lands under its jurisdiction to
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determine what lands are in excess of the agency's foreseeable
needs and to report to DGS.
3)Provides criteria for state agencies to use in determining and
reporting to DGS lands in excess of the agency's foreseeable
needs. A state agency is to include land not currently being
utilized, or currently being underutilized, for any existing
or ongoing program; land for which the agency has not
identified any specific utilization relative to future needs;
and land not identified by the agency within its master plan
for facility development.
4)Requires DGS to determine if surplus land is needed by any
other state agency, and to first offer surplus state real
property to local agencies, and then to nonprofit affordable
housing sponsors, as defined, prior to offering the property
to private entities. Existing law also prescribes the
procedure for local agencies and nonprofit affordable housing
sponsors to use to obtain the surplus state real property.
5)Specifies that the Legislature may authorize a particular
surplus property be sold at less than fair market value and
provides that 30 days prior to executing such a transaction,
DGS must report to the chairs of the fiscal committees of the
Legislature the following information: the financial terms of
the transaction; a comparison of fair market value for the
property and financial terms; and the basis for agreeing to
terms and conditions other than fair market value.
6)Exempts the sale of surplus property from designated
provisions of the California Environmental Quality Act (CEQA).
Specifically, the law provides that any disposition of a
parcel of surplus property made on an "as-is" basis shall be
exempt from statutory requirements of CEQA; however, the law
makes it explicit that the buyer or transferee of a parcel
shall be subject to any local governmental entitlement or land
use approval requirements and CEQA. Furthermore, existing law
provides that if any transaction is not on an "as-is" basis
sale and close of escrow is contingent on satisfying any local
governmental approvals for entitlement or land use
requirements, including compliance by the local government
with CEQA, then the execution of the purchase and sale
agreement or exchange agreement is exempt from CEQA.
7)Requires, pursuant to Proposition 60A of November 2004, SCA
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18, Johnson, Resolution Chapter 103/04, that the proceeds from
the sale of surplus state property, with specified exceptions,
be used to pay the principal and interest on the Economic
Recovery Bond Act of 2004.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . This bill is the annual surplus property
bill sponsored by DGS. According to DGS, "This bill is
necessary to dispose of three excess properties identified by
State agencies."
Background - General . In the early 1990s, DGS undertook a
program to save money and make government more accessible to
citizens by rearranging state offices in major urban centers.
The plan also envisioned consolidation in numerous other
California communities where the state leased dispersed office
space. Based on a series of regional plans and facility
studies, DGS' efforts led to office consolidation projects
(completed or in the process of development) in major
metropolitan areas (e.g., San Francisco, Oakland, Los Angeles,
Riverside/San Bernardino, Long Beach, San Diego and Sacramento).
Under the provisions of Proposition 60A, the proceeds of the
sale of surplus property must be used to pay the holders of the
state's deficit reduction bonds. These payments are intended to
accelerate the redemption of the state's debt, and reduce future
General Fund payments to the bondholders.
The ability to get excess properties declared surplus by the
Legislature has been impeded these past few years by a
disagreement between the Legislature and the Administration
regarding the removal of a statutory exemption for the State's
surplus properties from the requirements of CEQA. This
disagreement has at least for now been resolved with enactment
of AB 8xx (Nestande), Chapter 6 of 2009-10 Second Extraordinary
Session, that places within Section 11011 of the Government Code
an ongoing CEQA exemption for all properties declared surplus by
the Legislature.
Background - Agnews Developmental Center . In 1876, the State
purchased 323.5 acres of farmland from Abraham Agnews. Agnews
State Hospital was established in 1885 as a neuropsychiatric
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institution for the care and treatment of persons with mental
illnesses. This facility became known as the West Campus.
In 1926, the State acquired an additional 424 acres (known as
the East Campus), which was located one and one-half mile from
the main facility (which became the West Campus).
Approximately 337 acres of the original East Campus has been
sold or transferred. Most significant, was the sale of
approximately 140 acres to Cisco Systems (Cisco) in the
mid-1990's. Also, in the mid-1990's the West Campus was closed
and declared surplus. This property was sold in stages and
became the corporate headquarters for Sun Micro Systems, as well
as a new mixed-use community known as the Rivermark Development.
The Agnews East currently resides on the remaining 87 acres on
the north edge of the city of San Jose, in the heart of Silicon
Valley. As of April 2009, under the closure plan, the
Department of Developmental Services has transferred all the
clients to community based housing facilities or to other DDS
facilities. There are 51 buildings on the campus, comprising
approximately 692,800 gross square feet of space.
A third party owned cogeneration plant provides thermal and
electrical energy to Agnews and markets electricity to PG&E.
The cogeneration agreements expire in the year 2020.
DGS is the lead agency in facilitating the future use of the
real estate, existing leases, structures and infrastructure of
the campus, including disposition of the cogeneration plant.
The Department of Developmental Services has responsibility for
maintaining the property until DGS transfers or otherwise
disposes of the asset.
REGISTERED SUPPORT / OPPOSITION :
Support
Department of General Services (sponsor)
Opposition
None on file.
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Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301